Daily Fantasy Sports Explained

Hey All, 

And so it begins......the start of the 2018 MLB season and the massively powerful Yankees lineup.  Stanton started the day off with 2 bombs, so my question is....over/under 110 HRs for Stanton and Judge?   

Anyway, lets get to the article. 

This article is overdue considering I'm trying to dedicate my Steemit account to fantasy sports related material (and homebrew beer making) but have yet to write up anything regarding daily fantasy sports ("DFS").  I think its good to provide a brief explanation of what DFS is, how it works, and why it is so much fun and addicting for anyone that enjoys fantasy sports. 

The article is a bit lengthy but to help you guys out I've tried to divide it into segments.  Please feel free to skip ahead to relevant portions you may be interested in.  This should also help anyone trying to find some quick info on a particular aspect of DFS.  

Photo Courtesy of CNBC.com

Background

DFS, formally known as daily fantasy sports, has been around for over a decade now but really took spotlight starting in early 2013.  The two biggest names in the industry right now are FanDuel and DraftKings.  FanDuel was founded in 2009 while DraftKings didn't take to the scene until 2013.  It's around this time that the fantasy sports world would change.  

Most of us are probably familiar with fantasy sports.  The most common being fantasy football, other sports such as basketball, baseball, and hockey all have been around since before even the age of the internet.  Fantasy sports, particularly in America, is really a phenomena where grown men and women pretend to be the owners of imaginary sports team in which they compete fiercely against their friends, coworkers, and family members.  The concept is pretty simple, draft players for your respsective sport and hope that your team has the overall best performance by the end of the season.  There a million variations that we won't get into detail about but in general, that is how fantasy sports are played.  Fantasy sports have grown so popular that there now exists even a professional trade association dedicated to all things fantasy sports called the Fantasy Sports Trade Association ("FSTA").  In fact, it has grown so large and popular, the FSTA estimated that the industry is now worth over an amazing $7 billion dollars with over 59 million fantasy sports players (see https://fsta.org/press-release-fantasy-sports-now-a-7-billion-industry/).  If you interested in digging deeper, I highly encourage you to visit www.FSTA.org and check out all of their random stats rated to the industry.  One partiular stat I found amusing is that it is estimated that American companies lose over $17 billion each year as a result of workers spending hours talking, researching, and playing fantasy sports while on the clock (see http://time.com/money/4475817/how-much-fantasy-football-costs-employers/). 

So if fantasy sports are so successful and popular, why are we seeing companies "reinvent the wheel" so to speak and create platforms such as DFS?  Well, for one, as mentioned we are talking about a massive money making industry ripe to take advantage of.  Another, less obvious reason, is that there are many fantasy sports players that clearly want something more.  For example, one of the single worst feelings for a fantasy sports owner is when their star or first round player is lost for the season due to injury.  Sure you can try to find ways to replace them and if you are really good and lucky, you may have drafted well enough to survive.  But, often times many team owners are stuck and out of the race, especially when you are deep in the season and have no chance of winning.  DFS takes care of this.  Depending on the sport, DFS offers daily or weekly games where you can select a brand new roster.  Tom Brady not playing this week?  Ok, no problem draft a different QB.  Not only does it allow for a fresh start each and every time there are a series of games but it also offers something people want more and more of.  Instant satisfaction.  If you play NBA or MLB, you literally know by the end of the day whether you won or lost and can pick right back up the next day.  For NFL, its each weekend.  

There is also the money aspect.  People bet a lot of money of traditional fantasy sport platforms.  Typically there is a fee to play and payouts to winners at the end of the season.  For DFS, there are payouts each and every time a slate or series of games ends.  So, for instance, if you play an early MLB slate, you could have winnings in your pocket by 7pm that same day.  There are also massive payouts that offer players slim chance of taking home huuuuugeeee payouts, at times millions.  The difference being you play your lineup against tens of thousands of other players resulting in really large winnings for the top finishers.  There are even people now claiming to be "professionals" in the industry that literally make a living playing DFS and winning massive prizes. 

You get the point.  Combine traditional fantasy sports with instant daily satisfaction and massive amounts of money and winnings and you have the most addictive form of fantasy sports on the planet.  DFS is a massive industry and continues to grow, so its up to us to find ways to capitalize on that. 

How Does DFS Work?

DFS is very similar to traditional fantasy sports in that you draft a lineup and play against other players.  Typically, there are salaries that you are restricted to (salary cap) that vary by sport and by hosting company.  This helps even the playing field and make it impossible to just load your team with the best players.  It also creates strategy, knowing which players are worth their salary, which players are underpriced and are values, and how to build the most complete roster.  In truth, this strategy also has saved the industry of DFS from being considered "gambling" and possibly being illegal.  The examples used below reflect how FanDuel operates. 

• MLB
  • Drafted Positions: Pitcher, Catcher/First Base, Second Base, Third Base, Short Stop, Outfielder, Outfielder, Outfielder, Utility
  • Salary: $35,000
• NBA
  • Drafted Positions: Point Guard, Point Guard, Shooting Guard, Shooting Guard, Small Forward, Small Forward, Power Forward, Power Forward, Center
  • Salary: $60,000
• NHL
  • Drafted Positions: Center, Center, Wing, Wing, Wing, Wing, Defense, Defense, Goalie
  • Salary: $55,000
• NFL
  • Drafted Positions: Quarterback, Running Back, Running Back, Wide Receiver, Wide Receiver, Wide Receiver, Tight End, Kicker, Defense
  • Salary: $60,000 (going off memory here as NFL isn't posted as of writing)

You can see generally how roster construction and salary restrictions work.  Some high profile players and high scoring positions cost more than others, making strategy an integral part of DFS.  DraftKings and other DFS platforms have a very similar setup although they do offer different salary restrictions and roster positions.  For example, in MLB DraftKings requires 2 starting pitchers to be selected and does not offer a utility player.  Sites also different in the sports offered.  In addition to the signature sports above you can also find contests related to PGA, MMA, Nascar, Soccer, and even competitive video games.  

Contests

There are also a variety of contests available.  You can play the traditional head to head type of contest or you can venture into the massive tournaments consisting of thousands of players. There are even 50/50 type contests where 1/2 of the field/entires wins money.  Each have their benefits and downsides including total cash payouts and general difficult in winning.  There are often strategies related to each contest.  For example, you may not want to play a player that is owned by 60% of owners in a tournament consisting of 50,000 lineups since you have no real advantage or edge.

Prizes

DFS, as mentioned, also offers you the ability to wager money on each contest.  Ranging from .25 cents to thousands of dollars, there are a ton of different contest fees available to the player.  The more you potentially lay on the line, the more you can win (or loss).  Each contest has an associated prize pool that is determined by the number of total players/lineups and the entry fee per player/lineup.  In larger tournaments, typically the top 25-30% players are awarded a prize.  Even more, you can expect that that number is weighted to be very top heavy.  That is, the lineup in 1st wins the majority of the money.  In a similar fashion, if you play head to head or a small contest of up to 5 total players, only 1 person might take home the winnings.  Its important to note that this is also where the industry makes money.  Like a casino or a backdoor poker game, DraftKings, FanDuel, and other companies take a rake.  Really good players pay attention to this because the rake can vary substantially from one contest to another (typically around 15%) meaning the players are getting "less" of money paid out.  All in all, you can see how DFS can become extremely competitive with massive amounts of money on the line.  

Strategy

As I mentioned previously, strategy is a integral part of playing DFS.  This is also what makes it slightly addictive (besides the money).  You can spend hours researching the best quarterback or pitcher for the days slate.  You have to pay attention to injuries and players sitting out as this can not only be someone you don't want to play but open up opportunities for cheap bench players that might help alleviate your salary restrictions.  Weather is also a major factor especially in baseball.  There are ways to construct lineups and theories such as "stacking" which involves playing players from the same team to capitalize on correlations (QB/WR, 2,3,4 hitters batting in a row).  You may also want to consider trying to be contrarian and play low % owned players to differentiate your lineup from others.  The strategy aspect of fantasy sports and DFS can be overwhelming but fun and exciting.  It is what truly separates good players from great players.  

Resources

In my personal opinion, its important to understand what resources exits to help you capitalize and get the best advantage in DFS.  There are now hundreds of websites dedicated to providing articles, advice, and tips for free or as a paid-for-service.  There are even now "optimizers" that you can pay for and have them automatically shoot out lineups based on projections.  

I plan to write up some articles and reviews on all of the different resources that are beneficial for DFS.  But for now, below are a couple great free websites and companies offering good advice across all platforms and sports. 

• Rotogrinders: www.rotogrinders.com
• Daily Fantasy Sports 101: www.dailyfantasysports101.com

There are also a ton of great books now on the market highlighting strategies, details about the industry, and general advice.  

Of course you also want to check out the actual websites of the companies running the contests such as FanDuel and DraftKings (see links below).  They are now also offering 101 lessons and articles dedicated to the days best players and values. 

How to Start Playing DFS

It's relatively simple to start playing DFS.  Personally, I am a big fan of FanDuel (save the why for another article) but also play a bit of DraftKings.  Each offer their own unique twist on DFS but in the end its the same general contest.  Do you research, build the best lineup you can, and take home some winnings.  

Each site offers bonuses for new users.  If interested, please consider following my referral links below. 

• FanDuel: https://www.fanduel.com/?invitedby=haleyi14&cnl=da 
• DraftKings: https://www.draftkings.com/r/Yinzer724 

Once you create an account it is just a matter of depositing money and finding the sport and contest you want to play.  Set your best lineup and starting bringing in the big bucks!

I hope this article is helpful for those of you interested in fantasy sports and interested in DFS.  Please let me know in the comments what you guys think and if you are involved in any of the contests.  

Big-E